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Vietnam Coffee: Discounts widen, harvest in full swingWednesday, December 10, 2014 > 09:17:15
Thin buying at the start of the holiday season has slowed Vietnam's coffee trade in recent days despite a steady flow of fresh beans from the harvest peak, traders said on Tuesday.
Buyer hopes that prices will soften after the holidays have also hit activity in the coffee export market in Vietnam, the world's largest producer of the robusta bean, traders said. "Buying demand is very low now," said a trader at a foreign firm in Ho Chi Minh City.
"After the New Year holidays prices could soften, so buyers are not rushing." He estimated 60-70 percent of the crop in the Central Highlands coffee belt has been picked, while other traders said around half was completed. The region produces about 80 percent of Vietnam's total output. "It is the peak time of the harvest so coffee is arriving in bulk," said another trader in Ho Chi Minh City.
As such the harvest is slightly behind last year when up to 80 percent of the crop had been picked as of Dec. 10. That harvest ended in December.
On Tuesday, robusta eased to 40,400-40,600 dong ($1.90) per kg, from 40,800-41,200 dong a week ago in Daklak, Vietnam's top growing province, after London's March contract ended down 0.9 percent at $2,034 a tonne on Monday.
Discounts of Vietnamese robusta grade 2, 5-percent black and broken stood at $60-$85 a tonne to London's March contract, compared with discounts last week of $70-$80 a tonne to the January contract.
"In some places trees have already started flowering but the harvest there has nearly ended, so there will be no impact on the next (2015/2016) crop," the first trader said by telephone during a crop survey in the coffee region.
The harvest may be 20 percent smaller due to adverse weather, Vietnam Coffee and Cocoa Association Chairman Luong Van Tu has said. Traders forecast 2014/2015 crop output at 26 million to 30 million bags, against a record 30 million bags in the 2013/2014 season.
Vietnam could export between 120,000 tonnes and 150,000 tonnes (2-2.5 million bags) this month, up at least 26 percent from November.